Submission by Montreal Economic Institute

Responses to the consultation on Digital Health Care Market Study

Table of Contents

The identification of relevant laws, regulations, policies, or other factors that may impede competition is necessary to make evidence-based recommendations on ways to enhance competition in a particular sector. Through a better understanding of the competitive dynamics of the health care sector, recommendations can be made on how to support digital health care in Canada. As such, the Montreal Economic Institute is pleased to participate in the market study to help the Competition Bureau understand and implement pro-competitive policies that bring about greater innovation, choice, and access to digital health care across the country.

Data and Information

Are there barriers (regulatory or non-regulatory) that are preventing the access, use and sharing of digital health data and information? How have these barriers impacted the competitive landscape for digital health care?

1- The Inaccessibility of Electronic Patient Records

The inaccessibility of electronic patient records is a barrier to the access, use, and sharing of digital health data and information. During a virtual consultation, the physician may not have direct access to patient records or the ability to easily enter clinical notes in patient records. While some virtual care platforms offer the ability to enter clinical notes into the records, the market is fragmented.^{Footnote 1} Too often, electronic medical systems are designed locally or regionally and do not communicate with each other. Designed primarily for billing purposes, many of these systems also tend to underestimate patient complexity, yet at the same time tend to be overly complicated in their interface, disrupting the clinical encounter and hindering doctor-patient interaction.^{Footnote 2}

2- The Inadequacy of Electronic Patient Records

What’s more, the inadequacy of our electronic patient records deprives Canada’s health care systems of the advantages of having access to widespread and reliable health information. Indeed, having timely access to large databases that contain information on patient health would be an invaluable tool for physicians and public health authorities alike.

For physicians, such a database could enable precision medicine. According to an article in Nature, “the goal of precision medicine is to enable clinicians to quickly, efficiently and accurately predict the most appropriate course of action for a patient.”^{Footnote 3} In other words, large health databases would enable physicians to make custom diagnoses for each patient, reducing unwanted side effects and the dangers related to misdiagnoses.

Public health authorities would benefit from large health databases through the improvement of public health surveillance and assessment. The gathering of a very large amount of data constitutes an inestimable resource for epidemiological research and analysis and can help determine the health needs of a population. Such databases would thus enable population-based intervention and more informed policy-making. While the Bureau has noted it will not be investigating issues pertaining to the privacy of digital health data and information, privacy concerns are a top barrier to the collection, connection, and analysis of data needed to inform innovation decision-making.

What changes can be made to reduce barriers to the access, use and sharing of digital health data and information? How can this encourage more competition and innovation in digital health care?

1- Digital Interoperability

Digital interoperability across the health care system is essential to support comprehensive virtual care. Specifically, interfaces must have the ability to work with other existing products or systems without access restrictions, and in compliance with privacy and confidentiality laws.^{Footnote 4} Barriers to digital interoperability include infrastructure and regulation leading to siloed data, privacy concerns, lack of standards, and a lack of incentives.^{Footnote 5}

In addition, a strategy for privacy and data security that includes data governance and data sharing, secure software and communication infrastructure, and the protected storage of information and prevention of unauthorized access could help encourage innovators to enter the market. Patients should be provided with information regarding the use of personal health data as well as context regarding ownership, custodianship, autonomy, security, privacy, data integrity, and quality care.^{Footnote 6}

The work of the Canada Health Infoway with its ACCESS 2022 initiative is aimed at providing Canadians with more access to their health information across the country through electronic record connectivity.^{Footnote 7} This work could be used to guide the development of a pan-Canadian standard, as could the work being undertaken in AB and ON to set health information exchange guidelines.^{Footnote 8}

2- Transparent, Effective Communication to Citizens

Transparently and effectively explaining to citizens how their data can directly contribute to making digital health solutions safer, more effective, and more equitable is of the utmost importance. The more people understand how their data are used in health research, the more willing they will be to participate in sharing their data for such ends.

3- Education and Training for Health Professionals

To fully benefit from digital health care, “e-health” competencies must be integrated into the medical school curriculum and be part of our health care professionals’ continued professional development. All health care professionals must have full knowledge of the virtual tools and platforms at their disposal. Such education is key to accelerating the acceptance of the collection of health care data.

Products and Services

Are there barriers (regulatory or non-regulatory) that are restricting the range and scope of digital health products and services available for use by health care providers and patients? How have these barriers impacted the competitive landscape for digital health care?

Digital health technologies in Canada tend to be more rapidly commercialized and profitable when funded by and oriented toward American markets.^{Footnote 9} This is itself a problem for innovation, but in addition, these aims do not align with a universal system that should strive for containing costs and ensuring sustainability. As a result, the innovations tend not to be responsive to the needs of Canadian health care systems.^{Footnote 10} To facilitate further innovation, the provision of additional local/national seed funding or venture capital opportunities to spur innovation activities and decrease dependence on foreign investment is needed. In addition, building awareness and understanding among developers of unmet health system priorities is vital.

Expanding the range and scope of digital health products and services available for use by health care providers and patients could be achieved through private-public partnerships. Such cooperation can take many forms, including specialized clinics, virtual health care technology development, and even the private management of publicly funded hospitals. While the public sector must respond to the growing needs of an aging population with limited taxpayer-funded resources, the private sector is famous for its ability to “do more with less.” The public sector’s potential will not be fully realized without the private sector, whose participation can include benefits such as economies of scale, high-quality facilities and infrastructure, and innovative technologies, all while containing costs.

How do rules regarding the development and approval of digital products and services impact their availability and use? What steps can be taken to facilitate the development and approval of digital products and services?

Federal regulatory processes and provincial, territorial, regional, and local regulations, policies, and procedures all impact the availability and use of innovative digital products and services, such as medical devices.^{Footnote 11} Modernizing regulation and adoption processes, alignment across systems, and a targeted review process are ways in which the development and approval of digital products and services can be facilitated.

The development of digital products sees many non-traditional medical device manufacturers, such as software developers, subject to unfamiliar regulatory terrain related to medical devices. While Software as a Medical Device (SaMD) guidelines provide assistance on how to operate within Health Canada’s regulatory framework for digital products that fit the definition of medical devices,^{Footnote 12} challenges remain. The regulations use a risk-based approach and classification from lowest to highest risk, but as these were developed with traditional medical devices in mind, SaMD does not fit in the classification system well, and ambiguity results.^{Footnote 13} Clarity should be enhanced so that current developers can comply with the regulatory requirements and get their product to market, and so that new developers are better prepared and able to compete upon entering the market.

How do procurement and commercialization processes impact the ability for businesses to innovate and compete in the market for digital health care products and services? How can more innovation and competition be encouraged?

Procurement tends to be treated administratively and with competitive bidding. An issue with the current competitive model of procurement is that, by definition, innovative technologies will not have comparators with which to compete. Therefore, current procurement policies and procedures that are extremely risk averse, disconnected from innovation activities, and focused on cost-containment rather than on generating value are not accommodating to innovative technologies, which may have results or value that are more apparent in the long-term.14 The consideration of value-based (as opposed to cost-focused) procurement that is concerned with the life cycle of the technology can facilitate competition.

Health Care Providers

Are there barriers (regulatory or non-regulatory) that are restricting the ability of health care providers to deliver digital health care to patients? How have these barriers impacted the competitive landscape for digital health care?

The fact that health care providers are prohibited by certain provincial authorities from practising in both the public and private sectors restricts their ability to deliver digital health care to patients.^{Footnote 15} A foreseeable objection to allowing mixed practice is that it would result in a decrease in number of hours worked in the public system. This fear could be addressed by enforcing a minimum number of hours worked in the public system, as has been done elsewhere. In England, Australia, Denmark, and Norway, in particular, studies have shown that doctors who adopt a mixed practice overall increase the number of hours spent caring for patients, without reducing time spent in the public system.^{Footnote 16}

How do billing codes and compensation mechanisms for health care providers impact the delivery of digital health care? What steps can be taken to facilitate digital health care delivery?

1- Hospital Funding

There are two funding schemes to consider when discussing the mechanisms by which health care providers are compensated. The first relates to hospital funding. A key feature of Canada’s health care system, and one of the sources of its problems, is the use of the “global budget” funding mechanism.

Under global budgets, a hospital or organization gets a set amount of money, typically a yearly budget. If it has “too many” patients, it can request extra funds, but with no guarantee they will be forthcoming, since budgets are necessarily politically negotiated, like all government budgets. Hospitals have an obvious incentive to reduce the number of patients they treat in order to save, and to lobby against other priorities or indeed other hospitals for an increased budget, whether or not they actually need the funding.

The main alternative to global budgets for universal systems is activity-based funding (ABF). In contrast to global budgets, ABF means the funds follow the patient. If a hospital has “too many” patients, itautomatically gets the funding to go with those patients. And if it has “too few” patients, perhaps because service is poor or waiting times are too long, it automatically gets punished in the form of a lower budget. This means hospitals have a built-in incentive to do what they’re supposed to do: treat as many patients as they can, whether via digital care or in-person consultations.

2- Billing Codes and Compensation Methods for Physicians

The second billing scheme that impacts the provision of digital care is that of physicians. In Canada, physicians receive almost three quarters of their compensation in fee-for-service payments.^{Footnote 17} This method of remuneration requires that each potential medical act be defined, listed, and possibly invoiced. This approach is poorly aligned with contemporary health system priorities such as improving quality or delivering care more efficiently. It also eliminates any incentive to perform acts for which payment is not provided and discourages innovation in medical practice.

The provinces of Alberta, British Columbia, and Ontario have taken a step toward adapting their remuneration methods by allowing phone calls to be billed at the equivalent of an in-person visit. Previously, there were limits and restrictions on the use of telemedicine codes and billing for practitioners that disincentivized uptake.^{Footnote 18} Although a step in the right direction, alternative remuneration methods must be explored to facilitate the delivery of digital health care even further. A number of OECD countries have embarked on significant changes to their payment systems in response to the growing need to provide high-quality care to patients with complex health needs in a context of tight resources. For instance, population-based payments^{Footnote 19} show potential to overcome fragmentation of care leading to better quality outcomes and slower spending growth.^{Footnote 20}

The adoption of alternative remuneration methods would avoid having to define each new medical act. The general principle is to favour more types of remuneration that focus on the care provided to the patients as a whole, taking into account performance indicators, rather than each of the individual interactions with the doctor. In addition to fostering innovation, this would also encourage delegation to other professionals, such as nurses and pharmacists, since this delegation would no longer be associated with loss of income for the physician.

How do rules regarding medical licencing impact the ability of health-care providers to deliver digital health care? What steps can be taken to further enable the delivery of digital health care?

There is variability across the country in terms of standards and policies on licensure requirements for the provision of telemedicine/telehealth services by physicians. Licensure is not required in Ontario, Nova Scotia, and Newfoundland and Labrador for telemedicine, and British Columbia does not specifically state the registration or licensure requirements of out-of-province physicians in the provision of telemedicine services.^{Footnote 21} However, the remaining provinces all hold explicit requirements and licensure rules which serve as barriers to the delivery of digital medicine.

Saskatchewan requires a specific telemedicine licence,^{Footnote 22} and Quebec, Manitoba, and Prince Edward Island also have specific licensing requirements.^{Footnote 23} New Brunswick has a telemedicine regulation which allows physicians from other jurisdictions to provide telemedicine services so long as they are licensed in their home jurisdiction and adhere to New Brunswick’s statutes, regulations, rules, and policies.^{Footnote 24} In Alberta, to provide telemedicine services one must have an Independent Practice Permit which is issued by the College of Physicians & Surgeons of Alberta, unless it is for emergency purposes or for fewer than six consults per year.^{Footnote 25} Similar requirements exist related to emergency and temporary purposes in Yukon and the Northwest Territories.^{Footnote 26}

In essence, there is a patchwork of licensure requirements across the country that are barriers to health providers being able to deliver digital health care.

Reducing licensing regulations, for example through mutual recognition of provincial licences, could help increase the supply of and access to care. In other words, if a physician or nurse has a valid licence from a professional college in one province, colleges in other provinces should consider that licence to be valid in their jurisdiction as well. This is currently the case for almost all provinces for nurses providing telemedicine consultations. Making it so across the country and for doctors as well would remove a significant barrier to the development of telemedicine, but there would also be gains for provincial public systems. Mutual recognition of licences would allow for greater mobility of the workforce and better allocation of resources. It would also remove the administrative burden related to obtaining multiple provincial licences, which discourages health care professionals from practising in multiple provinces.

How do rules regarding the scope of practice for health care providers impact their ability to deliver digital health care to patients? For whom and how can the scope of practice be modified to further enable the delivery of digital health care?

The scopes of practice of nurses, nurse practitioners, pharmacists, and others should be expanded as much as possible to match their professional capacity. Differences still exist between provinces in the professional capacity of the same group to perform or not perform certain procedures, suggesting that there is still room for improvement. Provinces should therefore encourage maximum expansion of the scope of practice of their health professionals based on the rules of the province with the broadest capacity in each case. Such reforms would have an impact not only on the spread of telemedicine and the provision of digital health services and products, but on the entire health care system. The less reliant telemedicine facilities and companies are on physicians, who remain a scarce resource, the more they will be able to expand their services and improve access for patients.